By Sang Jianxin, CNCIC
High-end, differentiated development is inevitable
At present, the coal chemical industry has become an important part of the chemical industry. The traditional coal chemical industry, including synthetic ammonia (fertilizers), methanol, coking, calcium carbide, and formaldehyde, etc. has entered into a mature period. These sectors are facing overcapacity and their average plant utilization rates have remained below 70% for a long time. Fierce industry competitions have resulted in low profit margins. To address such problems, China has released a national industrial policy calling for the strict implementation of relevant access conditions and clean production standards for the traditional coal chemical industry, the elimination of backward production capacity, transforming traditional coal chemical industry with new technologies, and new processes to achieve industrial upgrading and structural adjustment.
The modern coal chemical industry mainly includes coal-to-liquids, coal-to-olefins, coal-based natural gas, coal-based mono-ethylene glycol (MEG) and coal-based aromatics, etc. The industry is characterised by large production scale and investment, high technology integration, reasonable resource utilization, wide feedstock sources, large market capacity and potential, high added value, and optimized adjustment of the process system and product structure. With China’s increasing reliance on overseas petroleum and rapid technology development, a series of modern coal chemical demonstration projects have been built up and put onstream in recent years. Coal-to-olefins plants have basically achieved safe, stable, long-term, and high-load operation, with declining coal and water consumption, improving treatment of the “three wastes” (waste gas, waste water, waste residues) and stricter environmental protection standards. The plants’ run rates have been staying above 80% during the past five years. The utilization rate of coal-to-liquids plants rose to nearly 65% in 2018 from 40% in 2017, while that of coal-to-gas plants climbed to 59%, up by 7.5 percentage points from 2017. There were eight new coal- (syngas) based MEG plants started up in 2018, with capacities totalling 1.74 million t/a, but the capacity utilization rate is only at 55.6%, down by 1.3 percentage points from 2017, as some new capacities have not been fully released. The maturation of the technology will ensure sound plant operation and economic benefits, which will bring China’s modern coal chemical industry onto the rapid industrialization track.
However, many problems still exist. First, the project scale is large and the product structure is converging. Most coal-to-olefins projects are designed to produce general- purpose polyethylene (PE) and polypropylene (PP), while the main products of coal-to-liquids are gasoline and gasoil. Such a single product structure will impose heavy risks of overcapacity. Second, the modern coal chemical industry is aimed at replacing petroleum. But, since the second half of 2014, when global crude oil values began to plummet, the competition between the two has been tightening. The modern coal chemical industry is in urgent need of enriching its product chain and enhancing its ability of hedging against risks. Last but not least, environmental pressure is mounting. The biggest problem facing the modern coal chemical industry is energy guzzling, high pollution, and high carbon emissions, and there is still a long way to go to meet China’s overall principle of “conserving, clean, and safe” energy utilization and building a low-carbon, efficient, and sustainable modern energy system.
New coal chemical materials have massive potential to tap
The new chemical materials industry is a strategically emerging industry that needs accelerating cultivation and development, as clearly proposed in the “13th Five-Year” National Strategic Emerging Industries Development Plan (State Council, 2016, No. 67), requiring a significant increase in the proportion of new chemical materials during the “13th Five-Year Plan” period.
The new chemical materials industry remains one of the few within the petrochemical sector that cannot meet domestic demand due to technical obstacles. It still lags behind international levels in such aspects as the small enterprises scale, the lack of scientific and technological innovation, the lack of ability to transform technological achievements, single product variety, and low-level homogenization, etc.
(1) Carbon fiber
Carbon fiber is a new type of fiber material with high strength and high modulus fiber with carbon content above 95%. Carbon fiber is a reinforcing material for advanced composite materials, boasting the characteristics of light weight, high strength, good durability, strong corrosion resistance, corrosion resistance to acids, alkalis and other chemicals, good flexibility, and strong strain capacity.
Carbon fiber has a wide range of applications in aerospace, automotive, electronic products and their casings, sports and leisure, civil engineering, industrial chemicals, and other industries. It is used in automotive components to enable vehicles to be made lightweight, which can effectively reduce fuel consumption and carbon dioxide emissions.
However, China’s carbon fiber technology has not yet made a breakthrough and the product technology is not perfect. First, product performance is unstable. Second, the product variety is limited, with no large tow products. Third, the costs are high. Although there are over 30 carbon fiber producers in China, with their combined capacities exceeding 30 kt/a, the capacity utilization rate is below 30% and 70% of domestic demand depends on imports, as domestic products are mostly low-end products and cannot meet downstream performance requirements.
(2) Needle coke
Needle coke is a bituminous coke with a high degree of graphitization. It is a high-quality variety developed in the 1970s. Needle coke products are high value-added products in the coking industry. Top-quality steel, smelted using ultra-high-power graphite electrodes produced by premium needle coke, is a necessity in industrial, national defense, medical, aerospace and atomic energy.
Needle coke is divided into petroleum-based and coal-based, in terms of different raw materials. Petroleum-based needle coke uses heavy oil as feedstock, while coal-based needle coke adopts coal tar pitch and its fractions as raw materials. Pre-treatment of petroleum-based needle coke is relatively simple due to low impurity content of its raw material.
China began to independently develop needle coke since the end of 20th century and has now formed a certain scale of industrialization. However, domestic products still lag behind their overseas counterparts in various indicators. Their products’ performances are not stable.
Domestic needle coke products are mainly used for graphite electrodes and lithium battery anode materials. Hence, the demand for needle coke is determined by the output of high power and ultra-high power graphite electrodes. The technological advancement of the steelmaking industry and increasing steel production have been boosting the demand for needle coke. Meanwhile, demand from the negative electrode material industry stays high, driven up by the booming expansion of the lithium battery industry.
However, the average run rate of China’s needle coke plants has rarely exceeded 30% since 2011, due to immature technology. China is a needle coke importer. Its reliance rate of needle coke imports topped 40% in 2018, as domestic products cannot meet its demand, in terms of either product quality or output. In addition, as there are a limited number of petroleum-based needle coke producers in China, over 60% of imports are petroleum-based. Needle coke used in the production of lithium battery anode materials is almost entirely imported.
New coal chemical materials have a huge potential to tap, not only carbon fiber and needle coke directly produced by coal, but also in the industrial structure adjustment of the traditional coal chemical industry. For instance, China needs to import a large amount of polycarbonate (PC) and ethylene-vinyl acetate copolymers (EVA). The modern coal chemical industry has a rich product chain and there are many routes for the development of new chemical materials, such as using coal-based propylene to produce acrylic acid, which is then used to yield superabsorbent polymers (SAPs).
The new chemical materials industry is key branch of the new materials industry. It is the most dynamic sector with huge development potential and has been granted policy supports. However, the technology is still not mature, and it is necessary to overcome technical difficulties and make breakthroughs in new coal chemical materials.
